Once-stalled negotiations between San Francisco and Sutter Health over a new California Pacific Medical Center on Van Ness Avenue are apparently making headway - thanks in part to a strategy change by the hospital chain.

The deal to build a 555-bed hospital looked as if it had collapsed after Mayor Ed Leeand Board of Supervisors President David Chiuasked Sutter for a guarantee to keep open its financially strapped St. Luke's Hospital, which serves many low-income residents, for at least 20 years.

Nobody wants to talk for the record, but with talks now being mediated by millionaire lawyer and bread baker Lou Giraudo, the two sides are considering whether a scaled-down version of a new hospital on Van Ness will fly.

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Sutter is also pushing the idea of expanding the 229-bed St. Luke's, at Cesar Chavez and Valencia streets, because the company has concluded it can attract more affluent patients from newly upscale South of Market.

We're told it was Chiu and his board colleagues who proposed bringing in Giraudo, the onetime Police Commission president and former mayoral aspirant, to try to get a deal put together.

Sources say the two sides have been meeting since the start of the month, and as one participant told us, "It looks promising."

Muni play: If Supervisor David Campos has his way, free Muni for low-income city kids will be the first stop on his ride to the state Assembly.

Assemblyman Tom Ammiano will be termed out in 2014, and Campos would love to replace him. Free rides for youths would be a wonderful campaign bullet point.

"It's not over yet, but I feel pretty good about it," Campos said of the City Hall fight over free rides.

As luck would have it, some of the most vocal supporters to show up for Board of Supervisors committee hearings on the issue were from the Chinatown Community Development Center - which is close to Campos' friend Rose Pakand helped get Mayor Ed Lee elected.

As a result, despite the objections of Supervisor Scott Wiener, who is concerned about using Muni maintenance money to cover the cost, the kids-for-free program appears to have Muni's support as well.

Muni Director Ed Reiskinis proposing to split the baby - using $5.1 million of the maintenance money for maintenance and $1.6 million for a one-year, free-ride pilot program.

Lee is ready to jump on board as well.

It's not the $6 million that Campos wanted. But hey, it's a good start - both for the kids and for Campos.

Taxing: He may hate public spending, but Howard Jarvis Taxpayers Association President Jon Coupal had no qualms when he recently tried to bill the state $480 an hour in legal fees for his fight with lawmakers over high-speed rail.

The group sued the Legislature four years ago over ballot language used to describe the rail project and wound up winning a partial victory that required the state to tweak a couple of phrases.

The Jarvis group promptly petitioned the court to cover its legal costs and then some, asking for almost $96,000. A judge awarded it $66,000, or $330 an hour.

Coupal, who just fought unsuccessfully against Proposition 30 - calling Gov. Jerry Brown's initiative an unfair tax grab - said his group deserved every dime.

"We are providing a public benefit in a case that probably otherwise wouldn't be brought," Coupal said.

Coupal is now back in court challenging a state fire tax on rural homeowners. And if he wins, he said, "I guarantee we will ask for our attorney's fees."

Derailed: The other night, San Francisco cops from the Bayview Station got a call about a stalled car on the railroad tracks at 16th and Mississippi streets.

When they arrived, they found the car and a woman standing nearby - next to a taxicab.

The cabdriver told the officers that he had stopped after seeing the woman trying to drive her car off the tracks.

The cabbie said the woman had asked him for a ride, but he refused because she was obviously drunk.

The cops then turned to the woman and asked how much she had to drink.

"Enough," she said.

Actually, she'd had more than enough, and after failing several sobriety tests was given a ride to County Jail.

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